Statement on the Machine Tool Industry

May 20, 1986

I have decided to seek voluntary restraint agreements (VRA's) on machine tool imports. In March 1983 the National Machine Tool Builders Association submitted a petition to the Secretary of Commerce recommending import quotas based on the view that imports of machine tools threaten the national security. Pursuant to statute, Secretary Baldrige submitted a report to me in February 1984. In March 1984 I decided that this report should incorporate new mobilization, defense, and economic planning factors then being developed by an interagency group. I then directed the Secretary of Commerce to update the machine tools investigation. In March 1986 Secretary Baldrige submitted his report to reflect this guidance. The National Security Council subsequently discussed the report, and on this basis, I have directed that import levels be reviewed during the next 6 months.

The Secretary of Commerce, in consultation with the Secretary of Defense and other relevant administration officials, indicated that the machine tool industry is a small yet vital component of the U.S. defense base. The Secretary of Commerce further indicated that high levels of imports can potentially erode U.S. capabilities to manufacture critical machine tool product lines. Based on this information, I have decided on the following course of action:

-- Voluntary restraint agreements will be sought with Taiwan, West Germany, Japan, and Switzerland on machining centers, computer-controlled and noncomputer-controlled lathes, computer-controlled and noncomputer-controlled punching and shearing machines, and milling machines.

-- The Departments of Defense and Commerce, in cooperation with the other agencies, will implement an action plan that will:

  • Integrate more fully U.S. machine tool manufacturers into the defense procurement process. In particular, companies will receive more timely information on U.S. defense programs and future DOD manufacturing requirements so that they may be able to participate at an earlier stage in the procurement process.

  • Modernize machine tool capabilities that support our national defense. DOD programs that improve manufacturing productivity as well as those that advance technology will be applied to the machine tool industry.

  • Provide up to $5 million per year over the next 3 years in Federal Government matching funds to support a private sector technology center to help the machine tool industry make advances in manufacturing and design.

  • The Attorney General and other agencies will investigate the potential for cooperative research and development efforts on the part of industry.

  • The Secretary of Commerce will monitor the U.S. machine tool industry's performance on an annual basis, with emphasis on the steps it has taken to improve its production capabilities and competitive position.

This action plan, combined with the administration's growth-oriented economic policies and dedicated efforts on the part of the U.S. machine tool industry, will ensure a world-class U.S. industry.